Bitcoin is having its party cut a little short thanks to folks over in China.

After riding value that reached higher than $1,000 for a single Bitcoin just a few weeks ago, the currency's value plummeted to about $500 yesterday after China officials banned banks and its largest Bitcoin exchange, Bitcoin China, from clearing Bitcoin transactions. This is the first move by China that will eventually see them phase out all Bitcoin transactions by late January by the Chinese New Year. Yet, this wasn't a surprise for many. Bitcoin's value has fluctuated for the better part of 2013, and though it had been on a rebound toward the end of the year, it wasn't in the clear just yet. Tyler Cowen, blogger at Marginal Revolution, made the prediction in November that if China were to shut down Bitcoin China, the currency's value "very likely will fall. A lot." Well, boom goes the dynamite.

"The Bitcoin bubble has burst and China was the pin that popped it," Mark Williams of Boston University says. "The latest move by China puts into question the viability of Bitcoin as a currency alternative and as a liquid and safe commodity."

China's move certainly hurts Bitcoin, but it's too early to say if the bruise will be long-lasting.